Hey Max, I think your offering is amazing but it might be built for the world of yesterday: Since starting this weekend apparently all deposits are 100% insured, why would I go to Mercury to take advantage of sweeps or a money market fund, when my bank offers me slightly higher rates for uninsured-but-insured-in-practice deposits?
1. As others have said in the comments, I wouldn't assume all funds are 100% insured. It is trending that way but I think if you are a CFO managing 10s of millions, its responsible to consider other assets.
2. Our interest rates on Treasury are pretty competitive, up to 4.67% for the slightly-less-conservative fund MULSX (various conditions apply, depends on how much you hold in treasury, etc; see https://mercury.com/treasury for details).
We are OK not having the absolute highest interest rate offering. Our position is:
* The Mercury product is much better than what most banks offer, across features like searching transactions, WebAuthn logins, virtual cards, etc (You can try the whole website at https://demo.mercury.com/)
* Mercury is much better optimized for startups (eg compliance that understands startup needs, doesn't ask your CEO to go into a branch to send wires)
You can always get a higher interest rate by eg buying treasuries yourself. Our position is for most founders, investing in these mutual funds is a safe, no-brainer options that optimizes for safety while keeping the convenience of a single dashboard.
I get this line of thinking, but I also think there's a counterargument that we're all on notice now that banks can go under. As commenters in other threads have noted, people are rebalancing their personal and business accounts right now. Companies like Roku probably won't have $400M at one institution anymore (without outside insurance). That means that if this happens again, many of the people who would have been screwed without a backstop this time around will be in the clear next time. There won't be as much pressure applied by high-level executives and lobbyists, so, as the saying goes, "past performance is not a guarantee of future results".
How is this safer than the alternative? There's no world in which the FDIC lets a bank the size of SVB default on it's deposits, so there are basically 2 scenarios here:
1) You get bailed out no matter what your insurance rate
2) Defaults are at such a high rate that the FDIC doesn't have the money to bail everyone out, the economy tanks, and all businesses that rely on risky VC investment fail anyway
It's like betting $100 on something that won't happen until you're dead. Sure, you might be correct, but there's no real benefit to it.
